Former SEC official John Reed Stark has warned the crypto industry about a rising tide of enforcement actions from the regulator.
The Regulatory Onslaught is Here
John Reed Stark, the former head of the Securities Exchange Commission (SEC) Office of Internet Compliance and a 15-year counsel for the regulator, has cautioned the cryptocurrency industry of an impending wave of “regulatory attack”. He served as the SEC’s primary cyber-related investigations, projects, and enforcement actions leader for 11 years.
On Thursday, Stark took to Twitter to explain that the SEC’s recent enforcement actions against major crypto companies such as Blockfi, Coinbase, Gemini, and Genesis were only the beginning. He posted:
Fasten your seatbelts: The regulatory onslaught is here.
The SEC charged Gemini and Genesis with “unregistered sale and offering of securities to retail investors via the Gemini Earn Crypto asset lending program” earlier this week. Last November, the agency took legal action against Blockfi, a cryptocurrency lender, which went bankrupt in February 2021. Moreover, the SEC threatened to sue Coinbase over its cryptocurrency lending program that was launched in September 2021, but was abandoned by the company.
Such FTX’s bankruptcy causes disturbing conflicts Not Surprisingly, however, the US trustee is opposed to the retention Sullivan & Cromwell. My question: Why Celsius/BlockFi/Voyager/FTX/etc. In Chapter 11 (reorganizations) versus to Chapter 7 (liquidations)? https://t.co/FqP1z5N9eR pic.twitter.com/AJHmKRYA1q
John Reed Stark (@JohnReedStark) January 15, 2023
Stark is a vocal crypto skeptic, often warning of the dangers of investing in cryptocurrencies. He stated last November that “in the land of cryptocurrencies, the Ponzi game continues & now a death spiral may have begun”. He further cautioned investors that crypto investments “have no FDIC insurance, no SEC review team, no regulatory oversight, no licensing, and no consumer protections.”
Be aware of the risks.
CNBC Mad Money host Jim Cramer echoed Stark’s warning, advising investors to exit crypto immediately. He reported that the SEC is doing a “big sweep” of the crypto industry.
